Preliminary Results. 22nd February 2018

Transcription

1 Preliminary Results 22nd February 2018

2 Mark Lewis Chief Executive Officer

3 Matthew Price Chief Financial Officer

4 Full year themes Diversified business delivering stable returns Doing a great job for our customers saving 2bn for customers, up 10% Mixed 2017 trading performance weak Energy and strong growth in Insurance Full year Adjusted Operating Profit 114m Completed Replatforming A modern and scalable tech infrastructure which provides a good foundation to deliver growth in the years ahead Great returns to shareholders Cash generation remains strong Increasing total dividend by 6% and completed a 40M share buy back 94M cash distributed to shareholders during the year 4

5 We continue to grow Revenue +4% AOP +6% EPS (Adjusted Basic) +8% 316m 330m 108m 114m 15.7p 16.9p Technology Investment Total Dividend +6% Operating Cashflow 23m 16m 9.85p 10.44p 106m 106m

6 Income statement Millions Growth Revenue % Gross Margin 74% 75% Adjusted EBITDA % EBITDA margin % 39% 38% Depreciation & Software Amortisation (13.4) (13.0) Adjusted Operating Profit * % Adjusted Operating Profit margin % 35% 34% Adjusting items * (19.0) (16.6) Operating Profit % Net finance costs (0.8) (0.7) Profit on disposal of associate & investment Taxation (18.0) (17.8) Net Profit % 6 Adjusted EBITDA is Operating Profit adjusted for depreciation and amortisation, impairment of Goodwill, amortisation of acquisition-related intangibles and other non-underlying costs Adjusted Operating Profit ( AOP ) is Operating Profit adjusted for impairment of Goodwill, amortisation of acquisition-related intangibles and other non-underlying costs

7 Our diversified performance Revenue 2017 ( M) 2016 ( M) Growth (%) Insurance % Money % Home Services % MoneySuperMarket.com % MoneySavingExpert.com % TravelSuperMarket.com % Intra-Group eliminations and other income (29.6) (27.8) Total Group % 7

8 2017 Online switching market growth Insurance 8% Money 7% +9% GROWTH Home Services 24% 8 Source: Based on internal data and external sources

9 Good progress against the strategic KPIs Best Site Earn Customer Loyalty Preferred Partner 24M (+3%) Unique monthly visitors 25M (+12%) People choosing to share data 989 (+1%) Number of providers 16m (- 7M) Investment in Technology 47% (+4%) Net Promoter Score 65% (+1%) Marketing margin 2.0B (+10%) Savings made by customers 9

10 Disciplined approach to marketing Marketing spend Revenue by source Millions YoY TV & Radio (3.6) Online spend Cashback (6.1) Other (1.5) 316m 330m 22% 24% 78% 76% 246m 250m Total Group Marketing margin 65% 64% 1% Search Engine Marketing Direct to Site & Partnerships Gross profit margin at 74% versus guidance at 73% 10

11 Our Replatforming is now complete Total Tech Investment Reinvestment Rate (%) 46m 23m 39m 23m +15% FY % FY m 16m Operating costs are mainly staff costs and licenses Technology capital investment Write-off 9M relating to product trials not rolled-out ( 3m) and early code base subsequently re-worked ( 6m) Reinvestment rate is defined as the total technology investment as a percentage of revenue Technology operating costs excluding amortisation 11

12 Strong levels of cash generation 113.9m 13.4m ( 2.6m) ( 20.9m) ( 18.9m) ( 40.0m) ( 54.4m) 44.6m 35.1m Net cash at 1 Jan 2017 Adj. OP Depreciation & amortisation Working capital/other Cash paid for capital items Tax Shares bought Dividends Net cash at 31 December

13 Outlook Expect Adjusted EBITDA to be broadly flat Forecast market growth around 6-7% Expect slower revenue growth for 2018, accelerating afterwards Investing in product engineering teams for our new strategy + 5M opex Reducing total capex by 5M Non-underlying costs in adjusting items 6-9M in onwards Profit growth resumes in 2019 Reinvent strategy aims to reaccelerate growth and lead innovation in the sector. 13 Non-underlying costs: Reorganising to align to the strategy ( 5-7M), and consultancy costs ( 1-2M)

14 Strong cash generation throughout Organic Growth Ordinary Dividends Acquisitions Special Distribution 14

15 Mark Lewis Chief Executive Officer

16 Reinvent Growth Strategy: Reaccelerate Core and New Market Growth Reaccelerate Core Growth New Market Growth Leading Trusted Brands Customer Experience Optimisation Leading Provider Offer Personalised MSM Take Price Comparison to the user Mortgage Price Comparison Help households save money 16

17 Strong, differentiated core business model Growing Markets 6-7% Core switching annual growth forecast Diversified with > 5m revenue in 14 categories Opportunity to unlock further market growth Engaged Users Market leading 69 NPS vs comparison average 64. MSM 67, MSE m Active users Revenue / Active user Marketplace Model 65% Marketing margin Proven provider benefits Efficient cash generation Updated KPI disclosure 17 Average annual switching volumes across our core markets based on internal data and external sources Comparison average NPS: Twelve monthly rolling average (1 Jan Dec 2017 inclusive) measured by YouGov Brand Index service Recommend Score weighted by revenue to create a Group wide NPS Comparison average includes comparethemarket.com GoCompare, Confused, Clearscore, Uswitch & money.co.uk Active User: The number of unique accounts running enquiries in our core seven channels in the prior 12 month period Revenue per Active User: The revenue for the equivalent core seven Moneysupermarket channel s divided by the number of active users

18 Replatforming has delivered critical assets, but restricted customer experience innovation REPLATFORMING FOCUS CUSTOMER EXPERIENCE FOCUS Adobe Content Management System Customer Experience Optimisation New Proposition Development Bespoke Aggregation engine M-Cloud Infrastructure API Service layer Enterprise Data Warehouse KEY DELIVERABLES: Aggregate at Speed and Scale Secure, stable, scalable cloud platform Single customer view & Analytics APIs to power our site and partnerships Commercial Gains New Proposition delivery 18

19 Customer Experience Optimisation will reaccelerate core growth Reaccelerate Core Growth Leading Trusted Brands Rapid innovation of the mobile customer journey Easier, faster, simpler experience Conversion gains and marketing efficiency Customer Experience Optimisation Leading Provider Offer Will scale across core categories through 2018 H trials have proven the concept Team and roadmap restructured to align for delivery Build out of Product Engineering hub in Manchester Attracting proven marketplace optimisation talent 5m Investment in Product Engineering teams, 5m Capex reduction KPI Goals: Active users Revenue / Active users Marketing margin 19

20 Reinvent strategy can unlock new market growth We will make price comparison Personalised, Proactive and Painless New Market Growth Three initial areas of focus Personalised MSM Take Price Comparison to the user Mortgage Price Comparison 20

21 1. Personalised MoneySuperMarket What How Why us A hassle free service for users to save on key bills in one place Key policies stored and monitored for best deals Simple summaries, helpful reminders and easy switching Automatically populate users policies in MSM mobile app Add policy monitoring and easy switching, e.g. Energy Add additional helpful reminders, e.g. Car MOT and Tax Disc Single view of 13m active users across multiple categories Enabled by Enterprise Data Warehouse In development, staged releases through 2018 KPI Goals: Revenue / Active users Marketing margin 21

22 2. Take Price Comparison to the user What How Why us Make it easier to save by taking personalised deals to users Present personalised offers in the apps they are already visiting E.g. Banking Apps attracting weekly visits Seek B2B Partnerships with new platforms New B2B sales channel Enabled by Partners data, enhanced with open data Leverages core strengths, enabled by new platform Trusted Brands, leading Provider offer Powered by aggregation engine and new API service layer Early Partnerships in discussion KPI Goals: Active users Marketing margin 22

23 3. Mortgage Price Comparison What How Why us Add mortgage switching to price comparison Help users find the right deal for them online Current model is a simple lead generation to call a broker Help users select and apply for mortgages online New user experience to find most appropriate mortgage Enhanced leads earning greater share of mortgage commissions Currently market leader in Mortgages search traffic 16m visitors across MSM and MSE, 25% of search traffic Trusted site for credit eligibility in cards Trials in development, staged releases KPI Goals: Revenue / Active users 23 Visitors: Number of visitors in 2017 to mortgage content on our websites Search traffic: In 2017 includes both paid and natural search

24 Reinvent Growth Strategy: Reaccelerate Core and New Market Growth Reaccelerate Core Growth New Market Growth Leading Trusted Brands Customer Experience Optimisation Leading Provider Offer Personalised MSM Take Price Comparison to the user Mortgage Price Comparison 2018 Scale Customer Experience Optimisation, Reduce IT Capex 2019 Profit Growth resumes Strong cash generation throughout 24

25 Appendix

26 Cash and capital update Software amortisation costs were 12.2 million in 2017 and we expect the full-year amortisation charge to be in the region of c. 14 million for 2018 We expect technology capital investment of c. 12 million in 2018 Intangible assets related to the pre-ipo reorganisation were fully-amortised in H Amortisation of assets relating to the MoneySavingExpert acquisition continues until 2022 at 1 million per annum. The total amortisation charge across these acquired intangible assets was 7.3 million for 2017 The Group has a revolving credit facility of 100 million until December 2020 Number of shares in issue 31 December ,179,804 26

27 Dividends, EPS and dividend cover Dividend (pence) Interim Final Total Ordinary Dividend Declared % % Dividend (pence) Earnings per share (Adjusted basic) Dividend Cover 1.6 x 1.6 x 27 Dates for final dividend 5 April ex-div date, 15 May - payment date

28 Adjusted operating profit Millions Variance Variance (%) Revenue % Gross Profit % Gross Margin 74% 75% Administrative Costs (111.0) (109.2) (1.8) +2% Distribution Costs (29.3) (34.3) % Impairment of intangible assets (9.3) (2.2) (7.1) Operating Profit % Amortisation of acquired intangible assets (7.2) Impairment of intangible assets (2.2) Strategy related one-off costs: Technology assets no longer in use Strategy review and associated reorganisation costs Adjusted Operating Profit % Depreciation (0.7) -37% Amortisation of technology related intangible assets % Adjusted EBITDA % 28

29 Adjusted cost base Millions Growth Staff costs Depreciation (0.7) Amortisation of technology Irrecoverable VAT Other administrative costs Total Adjusted Administrative Costs Advertising (3.6) Other marketing (1.4) Total Distribution Costs per P&L (5.0) Online and other marketing costs Total Marketing Costs Total adjusted cost base below gross margin Total Adjusted Cost Base Adjusted cost base refers to total costs excluding items adjusted for in arriving at AOP

30 Tax and Earnings Per Share Calculations Millions Profit before tax Standard rate of tax 19.25% (2016: 20%) Effects of: Expenses not deductible for tax purposes Movement related to share based payments Adjustment in relation to prior periods (0.7) (0.7) Tax expense for the period Effective tax rate 18.7% 19.5% Adjusted Earnings Basic average shares (millions) Basic adjusted EPS (pence) Diluted average shares (millions) Diluted adjusted EPS (pence)

31 Statutory balance sheet Millions 31 Dec Dec 2016 Property, Plant And Equipment Intangible Assets Technology Intangible Assets - Acquisition Related Investments Trade and Other Receivables Cash and Cash Equivalents Total Assets Trade And Other Payables (46.9) (46.8) Tax Assets and Liabilities (15.5) (16.3) Borrowings - - Total Liabilities (62.4) (63.1) Net assets Acquisition related intangible assets includes 55m Goodwill associated with the pre-ipo Group reorganisation, 53m Goodwill associated with the MoneySavingExpert acquisition plus 5 million other intangible assets from the acquisition of MoneySavingExpert. Tax assets and liabilities include both current and non-current balances 31

32 Revised revenue disclosure and profit measure Revenues 2017 ( M) 2016 ( M) Growth ( M) Insurance % Money % Home Services (20%) Core Group revenue % Other revenue % Total Group % Millions Variance Adjusted Operating Profit Depreciation (0.7) Amortisation of technology related intangible assets Adjusted EBITDA

33 Trading priorities Refocusing on core energy trading: Grown our core MSM energy business in the second half Maintaining growth in Insurance: Delivered 12% YOY growth Trading the Money category within the low interest rate environment: Q4 growth driven by promotional product Continuation of the Travel recovery: Core package holiday business grew >10% in H2 33

34 2017 Revised strategic KPIs Help households save money 2.0B 69% 65% Savings made by customers Net promoter score Marketing margin 13.2M Active users Revenue per active user 34 Definitions: Net Promotor Score: Twelve monthly rolling average (1 Jan Dec 2017 inclusive) measured by YouGov Brand Index service Recommend Score weighted by revenue to create a Group wide NPS Active User: The number of unique accounts running enquiries in our core seven channels (Car insurance, Home insurance, Life insurance, Travel insurance, Credit Cards, Loans, Energy) on the MoneySuperMarket website in the prior 12 month period Revenue per Active User: The revenue for the equivalent core seven MoneySuperMarket channels divided by the number of active users

35 Unique monthly users ,000,000 6,000,000 9,000,000 12,000,000 15,000,000 18,000,000 21,000,000 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 MSM MSE